The main disadvantage of an American Express card is the cost – not to you, but to the businesses it processes the payments for.
Unlike Visa or Mastercard, American Express operates its own network, which means it charges vendors an additional fee to use the card, much like some other credit cards.
That means that you won’t be able to use your American Express card everywhere. Particularly smaller retailers will decline an American Express card, and if you’re buying anything online with it you may be charged extra, so take that into account when looking at the rewards.
American Express cards that offer nice extras, like cashback or Airmiles, also tend to have limits on the offers. For instance, the cashback offers may be limited in time, or you only receive your Airmiles if you spend a minimum amount.
While this is fine in principle it means that it can also be very easy to miss out on rewards if you miscalculate, although the same is true for all rewards cards.
What’s more, if the offers are time-limited the card simply becomes a standard credit card after that offer expires. As these reward cards often have high interest rates it makes the card potentially expensive to use after the offer expires.
American Express credit cards
Compare American Express credit cards and other airline cards that reward you when you spend.
How to use American Express
The key to using American Express, like any other credit card, is to use it sensibly, paying off your debts, and taking advantage of the extra offers and features.
For example, you may be offered a credit card from American Express with extra car insurance cover and access to member’s clubs, but if you already have car insurance for the year, or if you don’t travel much and are unlikely to take advantage of special member’s clubs, then the extra cost may render an American Express a more expensive option.
Likewise, if the card offers you Airmiles contingent on a minimum spend you should make sure you adjust your spending to take advantage of the offer.
And, when you receive your introductory offer, consider carefully if you want to, or need to, keep the card.
Finally, like all credit cards make sure you pay off the balance in full within the interest free period to avoid sky-high fees.
Amex and other cashback or reward cards tend to have high interest rates and fees which is how they make their money.
If you fail to clear your balance and end up paying interest it could quickly wipe out the financial advantage of having the card in the first place.
Other bonus cards
Amex is by no means the only provider to offer cashback, rewards or other incentives. There are a huge range of both debit and credit Visa and Mastercard’s from a range of high-street banks that offer similar rewards.
For more you can take a look at our best reward credit cards page or our cashback credit cards to see our full table of great deals and offers.
If you’re planning on covering the minimum repayments by setting up a Direct Debit payment for example, as you should, then the interest rate shouldn’t worry you too much. Rather, focus on the rewards on offer and whether they fit with your usual habits or spending patterns.
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